Property Tax Calculator
Calculate income from house property and municipal tax implications
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Complete Guide to Property Tax Calculator India 2024
What is Property Tax in India?
Property tax is an annual municipal tax levied by local governing bodies (Municipal Corporation, Nagar Palika, Gram Panchayat) on property owners based on the location, size, and usage of the property. This tax funds essential civic services like water supply, sewage, street lighting, garbage collection, and road maintenance. Property tax rates vary significantly across cities - Mumbai charges 5-12% of Annual Rental Value (ARV), Delhi 10-20% of rateable value, while Bangalore uses capital value method charging 0.05-0.25% of property value.
How Property Tax is Calculated in India
Annual Rental Value (ARV) Method - Most Common
Formula: Property Tax = ARV × Municipal Rate
- • ARV = Higher of (Municipal Value OR Fair Rental Value) - 10% standard deduction
- • Municipal Value = Value assessed by local body based on carpet area, location
- • Fair Rental Value = Expected monthly rent × 12
- • Used by: Delhi, Mumbai, Kolkata, Chennai, Hyderabad
Capital Value Method
Formula: Property Tax = Market Value × Rate (0.05% to 0.25%)
Based on current market value/ready reckoner rates of the property. Simpler method but results in higher taxes for expensive properties. Used by: Bangalore, Pune, Patna.
Unit Area Value (UAV) Method
Formula: Property Tax = Built-up Area × Unit Rate × Factor
Tax calculated based on per sq.ft rate depending on location category (A, B, C zones). Factor depends on property age, type, floor level. Used by: Ahmedabad, Surat, Chandigarh.
Property Tax Rates Across Major Indian Cities (2024)
| City | Calculation Method | Tax Rate | Example (₹50L property) |
|---|---|---|---|
| Mumbai | ARV Method | 5-12% of ARV | ₹15,000-36,000/year |
| Delhi | ARV Method | 10-20% of rateable value | ₹18,000-40,000/year |
| Bangalore | Capital Value | 0.05-0.25% of market value | ₹2,500-12,500/year |
| Chennai | ARV Method | 15-30% of ARV | ₹22,500-45,000/year |
| Hyderabad | ARV Method | 10-25% of ARV | ₹15,000-37,500/year |
| Pune | Capital Value | 0.1-0.2% of market value | ₹5,000-10,000/year |
| Ahmedabad | UAV Method | ₹5-15 per sq.ft | ₹5,000-15,000/year (1000 sq.ft) |
Tax Deductions on Property Tax Under Income Tax Act
Section 24(b) - Municipal Taxes
- Deduction: 100% of municipal taxes paid
- Eligibility: Let-out property only (not self-occupied)
- Condition: Must be actually paid during the financial year
- Example: Paid ₹20,000 property tax = ₹20,000 deduction from rental income
- Benefit: Reduces taxable income from house property
Standard Deduction - 30%
- Deduction: 30% of Net Annual Value (NAV)
- Purpose: Covers repairs, maintenance, depreciation
- Eligibility: Automatic for all rented properties
- Calculation: NAV = ARV - Municipal taxes; Standard deduction = 30% of NAV
- No proof required: Flat 30% allowed regardless of actual expenses
Self-Occupied vs Let-Out Property Tax Treatment
| Aspect | Self-Occupied | Let-Out (Rented) |
|---|---|---|
| Annual Value | NIL (Zero) | ARV or Actual Rent (higher) |
| Municipal Tax Deduction | Not deductible under Income Tax | 100% deductible from rental income |
| Standard Deduction | Not applicable | 30% of NAV allowed |
| Home Loan Interest | Up to ₹2 lakh u/s 24(b) | Full interest deductible (no limit) |
| Loss Adjustment | ₹2 lakh max loss per year | No limit; carry forward 8 years |
| Tax Implication | NIL income from property | Taxable as "Income from House Property" |
How to Reduce Property Tax Liability
Most municipalities offer 5-10% discount for paying property tax before April 30. Mumbai offers 2% rebate, Pune 3%, Delhi up to 15% for early payment.
Property owners above 60-65 years get 30-50% discount in most cities. Mumbai offers 30% for 65+, Delhi exempts first ₹1.5 lakh for senior citizens.
Some municipalities offer 0.5-2% cashback for digital payments. Additional credit card reward points/cashback can save 1-3%.
Installing rainwater harvesting systems qualifies for 5-10% property tax discount in Chennai, Bangalore, Hyderabad.
Many properties are over-assessed. Request reassessment if: property age increased, area recalculated incorrectly, rate category changed.
Frequently Asked Questions About Property Tax
What happens if I don't pay property tax?
Non-payment of property tax leads to: 1% monthly penalty/interest on dues, water/electricity disconnection after 3-6 months, legal notice and property attachment, auction of property in extreme cases after 3+ years, inability to sell property (NOC required). Most municipalities charge 1-2% monthly interest on overdue taxes. In Delhi, 18% annual interest charged; Mumbai charges 1.25% per month.
Can I claim property tax deduction for self-occupied property?
No. Property tax paid on self-occupied property is NOT deductible under Income Tax Act. Only for let-out/rented properties, municipal taxes are fully deductible under Section 24(b) from rental income. However, you can claim home loan interest deduction up to ₹2 lakh per year u/s 24(b) for self-occupied property. For rented property, both municipal taxes and interest are fully deductible (no limit on interest).
How is property tax different from other property charges?
Property Tax (Municipal Corporation, annual, mandatory, funds civic services), Society Maintenance (Housing society, monthly, covers security/lift/cleaning), Water/Sewage Charges (Based on usage, separate from property tax), Stamp Duty (One-time, 3-7% of property value, paid during purchase), Registration Charges (One-time, 1% of property value, document registration). Only property tax and maintenance are recurring charges.
Who is responsible for paying property tax - owner or tenant?
Property owner is legally responsible for paying property tax, not the tenant. However, rental agreement can stipulate that tenant reimburses property tax to owner. Even if tenant pays on behalf, liability remains with owner. Municipal authorities send notices and can take action only against property owner. Many owners include property tax in monthly rent calculation. For commercial properties, it is common for tenants to reimburse property tax as per lease deed.
Can property tax be paid in installments?
Yes, most municipalities allow payment in quarterly, half-yearly, or annual installments. Delhi: Pay in 2 installments (April-September, October-March). Mumbai: Can pay in 4 quarterly installments. Bangalore: Annual payment mandatory. However, paying annually gives maximum discount (5-10%). Installment payments get proportionate discount. Online portals allow easy installment payments. Set up auto-debit for timely payments and discounts.
How do I check property tax dues online?
Most cities have online portals: Delhi: sdmc.gov.in or edmc.gov.in. Mumbai: mcgm.gov.in. Bangalore: bbmp.gov.in. Chennai: chennaicorporation.gov.in. Pune: pmc.gov.in. You need: Property Identification Number (PIN) or Survey Number or Property Owner Name. Portal shows: Current dues, payment history, demand notice, payment options. Download property tax receipt PDF after payment. Most portals integrate with payment gateways for instant online payment.
Does renovating my property increase property tax?
Yes. Major renovations that increase carpet area, add new floors, or change property usage (residential to commercial) will increase property tax. You must inform municipality within 30-90 days of completion. Authorities conduct periodic surveys and can penalize for unreported changes. Internal renovations (painting, flooring, fixtures) generally don't affect tax. Adding a floor can increase tax by 20-40% depending on city. Commercial conversion increases rates by 2-5x in most cities.
Is property tax applicable for vacant land?
Yes, but at lower rates (10-30% of built property tax). Vacant land tax based on: Location and zone, Area of plot, Front road width. Commercial vacant land taxed higher than residential. Some cities like Bangalore exempt agricultural land within city limits if actually used for farming. Delhi charges ₹50-200 per sq meter annually for vacant land. Mumbai: 50% of residential property tax rate. Constructing property increases tax significantly.
Can property tax rates change every year?
Yes. Municipal corporations revise property tax rates every 1-5 years through official notifications. Rate changes require: Municipal council approval, Public notice period (30-90 days), State government approval for major hikes. Typical increase: 5-15% every 3-5 years. You can: Object during public notice period, Request reassessment if rates seem unfair, Appeal to municipal commissioner within 30 days. Last major revisions: Delhi 2020, Mumbai 2022, Bangalore 2021.
Do I need to pay property tax for under-construction property?
No. Property tax applies only after: Completion Certificate (CC) issued by municipal authority, Property ready for occupation, Owner takes possession. During construction phase: No property tax liability, Builder responsible for taxes till possession, Buyer pays stamp duty at time of agreement. After possession: Tax liability starts immediately (even if you don't occupy), Pay within 30 days of possession to avoid penalty. Get property registration done promptly to receive tax notices.